The following data pertains to activity and costs for two months: Assuming that these activity levels are within the relevant range, the other production costs for July were:
A)$21,600
B)$20,000
C)$22,000
D)$19,500

Question

The following data pertains to activity and costs for two months:    Assuming that these activity levels are within the relevant range, the other production costs for July were:
A)$21,600 
B)$20,000 
C)$22,000 
D)$19,500

Quizplus · Accepted Answer

Direct materials per unit = $17,000 ÷ 10,000 units = $1.70 per unit
Total direct materials cost in July = $1.70 per unit × 11,000 units = $18,700
Fixed factory rent = $21,000 (given)
Total cost = Direct materials + Fixed factory rent + Other production costs
$61,300 = $18,700 + $21,000 + Other production costs
Other production costs = $61,300 - ($18,700 + $21,000)
= $61,300 - $39,700
= $21,600

The Following Data Pertains to Activity and Costs for Two